The Corporations Amendment (Streamlining Future of Financial Advice) Regulation 2014 (Cth) has been registered to give effect to the Government’s proposed amendments to the FOFA legislation on an interim basis until the Corporations Amendment (Streamlining of Future Advice) Bill 2014 is passed by the Australian Parliament. These regulatory amendments have made the following changes to the FOFA legislation, effective 1 July 2014:
- removal of the Opt-In requirement;
- requiring Fee Disclosure Statements to apply prospectively – for new clients from 1 July 2013 only;
- effectively removing the requirement to satisfy section 961B(2)(g) (the ‘catch-all’ provision) from the best interests duty;
- specifically providing for scaled advice;
- banning commissions on personal advice for investment and superannuation products and eliminating the possibility of a re-introduction of these commissions through the previously proposed general advice exemption; and
- amending the grandfathering regulations in order to remove the current restrictions on trade for financial advisers who may change employers/licensees, and enable fair market competition for financial advisers selling their business.
With the exception of the grandfathering regulations, the regulations for each of the above measures are required to be implemented through legislation by 31 December 2015. The regulations can be read on the Australian Government’s ComLaw website.